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OPINION: Somerset's Plan to Use Public Money to Compete with Local Businesses is Unfair

Date: July 10, 2014

The following column by NFIB/Kentucky State Director Tom Underwood ran on June 27 in Business First of Louisville:

One of the sorest subjects with the public is the price of gasoline and diesel fuel. Start a discussion on this topic and people get riled up. Everyone wants to stick it to the oil companies.

Click here to watch Tom Underwood talk about Somerset's plan on WLEX.

Recently, Somerset officials decided to take matters into their own hands and start selling discounted gasoline to the public. 

Trouble is, the government really has no business competing with the private sector, and I don't think socializing gasoline is really the best solution to the problem.

Basically, Somerset is buying gasoline and diesel fuel at wholesale prices and, because they aren't trying to turn a profit, they're able to undercut the private sector by several cents on the dollar.

Of course, that's going to hurt the privately-owned gas stations in the area. Remember, those gas stations and convenience stores not only provide jobs but also pay a truckload of money in taxes--money the city is then using to fund its little socialized gas station and drive them out of business.

Think of it this way:

Socks are important to Kentuckians. They keep our people from getting blisters, absorb foot moisture, and provide warmth and comfort. They can even be made into puppets to entertain our children. People need socks, and socks can be expensive.

Why, then, doesn't the City of Somerset start selling socks? How about giving residents a deal on fishing tackle, bait and beef jerky?

Allowing a local government to compete with private businesses on socks and bait would be idiotic, right? It's idiotic when it comes to gasoline, too.

What the City of Somerset is doing is simply unfair. It ultimately hurts the local economy and defeats the American model of free enterprise. Local government plays a vital role in the health of the community. It provides public safety, public works, parks, libraries and schools, among other things. One thing it shouldn't do is compete with the private sector.

Yes, gasoline prices are high. According to NFIB's most recent Small Business Problems & Priorities survey, the cost of gasoline, diesel fuel, natural gas and fuel oil is the third most-serious problem facing small businesses today, behind the cost of health insurance and uncertainty of the economy.

However, allowing a few bureaucrats to undercut private businesses isn't the answer.

Small businesses that create jobs and support the local economy face enough hurdles without competition from the very government that their taxes support.


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